OFS Mammoth Buys Sand Co. to Ensure Steady Supply for Fracking
Oilfield services company (OFS) Mammoth Energy Services, headquartered in Oklahoma City, OK, operates in both the Utica Shale and Permian Basin. Mammoth offers services like “completion and production services, natural sand proppant services, contract land and directional drilling services and remote accommodation services.” Mammoth is a baby company, formed in 2014, but growing rapidly. The company booked $243 million in revenue for the 12 months ended June 30, 2016 (see Mammoth Energy 3Q16: “Intense Fracs” in Utica Shale). OFS companies like Mammoth do a lot of fracking. Lately there has been talk and concern that there won’t be enough frack sand to meet all of the increasing demand (see Go Pound Sand, Please! Proppant Shortage on the Way?). Mammoth wants to reassure its customers that it will have plenty of sand for fracking–so it just went out and bought its own sand mine! Yesterday Mammoth announced it has cut a deal to buy Taylor Frac, which owns a 0.7 million ton per year sand mine and processing plant. In addition, Mammoth cut a deal to buy Stingray Energy Services and Stingray Cementing, which offer services in fresh water transfer, equipment rental, re-fueling and cementing, primarily in the Marcellus/Utica region. Here’s the lowdown on the baby Mammoth that’s growing up rapidly…
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Last September MDN reported on a midstream deal with major implications for the Marcellus/Utica: Canadian pipeline operator Enbridge Inc. announced an all-stock deal to buy out pipeline operator Spectra Energy, based in Houston, for $28 billion (see 
As we pointed out to you last December, evil corporate raider Carl Icahn (invests in companies so he can fire a bunch of people, boost the stock and pocket the profit) had fired Cheniere Energy CEO Charif Souki (see 
In November rumors swirled that WGL Holdings, the umbrella company that owns Washington (DC) Gas Light Company and WGL Midstream, is considering selling itself to utility giant (and Spanish-based) Iberdrola (see 
As MDN told you in November, Patterson-UTI Energy, an oilfield services company with major operations in the northeast, is buying out and merging in Seventy Seven Energy (SSE) in an all-stock deal worth $1.76 billion (see 
In May, U.S.-based oilfield services company FMC Technologies announced they will merge with their much larger quasi-competitor, France-based Technip, in an all-stock deal that will create a new company called TechnipFMC worth $13 billion (see 
In October EQT announced a deal to buy Trans Energy, Inc., a public pure-play driller in the Marcellus in West Virginia, which will become a wholly-owned subsidiary of EQT (see 
A kerfuffle erupted yesterday when Chapter IV Investors, a Charlotte, NC-based investment firm with investments in EQT, Range Resources and Antero Resources, announced it had sent a letter to EQT urging the company to consider merging with either Range Resources or Antero Resources. Chapter IV, which is essentially two big-money investors (W. Barnes Hauptfuhrer, Managing Partner and Portfolio Manager, and Ryan J. Jack, Partner), does not own enough stock in any of the companies (less than 1% in each) to throw its weight around like a corporate raider. Rather, it appears to be two investors attempting to grab the attention of these companies and their shareholders by issuing a press release (full copy below) with a plan they say would create a new Marcellus/Utica driller worth more than $25 billion. Obviously the value of investments for Chapter IV would go up under such a scenario–so there is self-interest at work here. However, we don’t detect any kind of bullying on the part of Chapter IV, like that of a raider Carl Icahn (successful takeover of Chesapeake Energy & Cheniere Energy) or Keith “Mini-Me” Meister (unsuccessful attempt to takeover Williams). Rather, it appears to be a couple of investors who believe there is an honest and good case for a combination of EQT with another company, and were willing to spend $500 on a press release to make their case. Are they right?…
Seventy Seven Energy (SSE) is the former Chesapeake Oilfield Operating company, the oilfield services subsidiary of Chesapeake Energy that Chessy spun out into its own company in July 2014 after it couldn’t find anyone to buy it (see 
Extreme Plastics Plus (EPP) has been manufacturing and installing well pad liners since 2007. Pad liners protect the ground from accidental spills of frack wastewater and chemicals used during the drilling process. Located in Fairmont, WV, EPP’s customers are in the Marcellus and Utica Shale region. In order to expand, EPP raised an undisclosed amount of investment money from Hastings Equity Partners in 2013 (see